Haunted Real Estate: What are the Rules When Buying and Selling?

How would you feel if one spooky night you discovered your new home also housed a family of evil spirits or long dead ghosts?

Even if you don’t believe in haunted houses, there are plenty of people out there who do—or who just want to hedge their bets. But could a history of haunted happenings really hurt the value of your home when it came time to sell?

The numbers don’t lie

Of course, how your property is received all depends on its particular brand of spooky.

A couple of studies in recent years confirm that a reputation for hauntedness has an impact on values. A realtor.com survey found that only about about one-quarter of buyers are open to buying a haunted home, especially if they get a discount, while 38 percent would not consider a haunted home purchase.

Another study by Redfin found that homes located close to cemeteries take longer to sell, but that the wait might just be worth it, since they tend to sell for prices higher than identical homes located in the same city but at a greater distance from a cemetery.

According to a study by two business professors at Wright University, though, houses where murder or suicide have occurred can take 50% longer to sell and at an average of 2.4 percent less than comparable homes.

The rules of buying and selling haunted real estate

Rumors of ghosts raise the question of disclosure.

Most states require sellers to fill out a standard form, revealing what they know about the property’s physical condition. Although the wording may vary state to state, most real estate laws require sellers to disclose “material facts” such as structural concerns, the age of the roof and shingles, leaks in the foundation and walls, existing mold and mildew, and total square footage.

In a 1991 New York case, though, a buyer sued the seller and the seller’s realtor for failure to disclose the house’s ghostly reputation.

Before putting the house up for sale, the seller wrote about her bumps in the night for the local paper and Readers’ Digest, but the buyers were unaware of the home’s reputation. Although the court did not rule nondisclosure of the house’s reputation as fraudulent, it did allow the buyer to back out of his contract and get his down payment back.

So what does this mean for you?

You are not likely to see a “haunted” box ready to be checked off on any state’s disclosure form, but in many areas, sellers are required to obligated to disclose things that affect a house’s marketability. Thus, even if not required by state law, it is a good idea to inform prospective buyers about rumors or reports and what exactly you have observed, without drawing conclusions.

from Total Mortgage Underwritings Blog http://ift.tt/2el3jON